Changes to GAAP and Other News

This week I’ll bring to your attention two new books that you might find interesting, guidance on what to think about if you are contemplating a merger, a FASB and GAAP update and this weeks Question and Answer.

Nonprofit Legal Issues and Volunteer Management

The above two topics a what these two books form the Nonprofit Risk management Center deal with. EXPOSED: A Legal field guide for nonprofit executives, will be a handy reference for those who have ever needed, or may yet need, to contact a lawyer. It is written specifically for the non-lawyer who still needs to know what about the possible legal issues their nonprofit might face. Click the above link and you can read a free preview.

Nonprofit Mergers

Are You a Good Candidate for a Merger? This is what the latest Tools You Can Use from the Fieldstone Alliance asks. The article poses eleven question nonprofit organizations should ask themselves as they contemplate a merger and gives more resources to go to. The Nonprofits Assistance Fund also updated their good idea about how to find a merger partner here.

FASB and GAAP Update for Nonprofits

For some time the Financial Accounting Standards Board (FASB) has been working to codify Generally Accepted Accounting Principals (GAAP). The end result will be a new coding system for the existing rules, not new accounting rules, with the idea to make it easier to track down relevant information to answer questions. It is set to go into effect September 15, 2009. If you would like to check it out for your self and take a look at the section for not-for-profit entities you can go here to sign up for free access.

A Questionable Relationship

Question: The Board Treasurer and the Bookkeeper of the nonprofit I work with are husband and wife. The Bookkeeper opens the mail and makes the bank deposit as well as maintaining the records on who gave what. The Treasurer manages the accounting and pays the bills. Is this a breach of ethics?

Answer: Not exactly a breach of ethics unless your organization has a code of ethical standards that prevents a relationship like this existing. But the possibility for fraud to occur is there. Perhaps more importantly, the appearance of the possibility of fraud to occur is there. I would advise that perhaps duties should be shifted to separate these folks from having responsibility over one another and to reduce the chances that they could collude together to defraud your nonprofit.

There is always the risk of alienating folks dedicated to the mission of the organization by injecting more “business like” activities such as risk management and internal controls. But that needs to be balanced with making sure the organization’s funds are well cared for. I think if it is explained correctly, most people would be willing to make changes to protect the nonprofit so it can keep doing the work it does.

Questions?

Do you have a question about a nonprofit accounting issue? Is something on the website vague or unclear? Please go here and ask away. Thanks!

Workshop Resources

Looking for all the stuff Alan mentioned in a workshop? Click here for a list of the main ones or feel free to use the search box above. You can also contact me if you can't find what you are looking for.

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